Monday, November 29, 1999

Simbhaoli in talks to dilute 45 pc stake in Kandala refinery

New Delhi, June 16 (PTI) Simbhaoli Sugars today said it is in talks with a couple of European companies to offload a 45 per cent stake in the special purpose vehicle (SPV) created to set up a port-based refinery at Kandala, in Gujarat. "We are in discussion with a couple of companies based in Europe to dilute 45 per cent stake in Kandala refinery. Talks are on. But we are yet to zero in on one," Simbhaoli Sugars Chief Executive Officer G S C Rao told PTI here. Simbhaoli Sugars, a leading manufacturer of the sweetener in the country, had earlier this year announced its plan to set up a greenfield refinery with 1,000 tonnes per day of raw sugar processing capacity at an outlay of around Rs 200 crore. Stating that the deal was likely to be inked within a month, Rao said that Simbhaoli would retain the remaining 55 per cent stake in the SPV, named ''Uniworld''. Rao, however, declined to identify the firms Simbhaoli is in talks with for roping in as a joint venture partner, though he said that it is an international player having operations in various countries. On funding of the project, Rao said, "It will be financed with an equal debt-equity ratio. We are negotiating with a couple of public sector banks for the debt part." Within the facility, Simbhaoli intends to refine raw imported sugar and sell it in the local market. At the same time, it is open to exporting the refined sugar back to overseas markets when there is a surplus in domestic markets. "Work on the project will start in two months'' time following signing of the joint venture partnership deal and getting the bank loan," Rao said, adding it may take 18 months for the project to go onstream from the zero date. Simbhaoli has already acquired around 50 acres of land, which would suffice even if the company proposes to double the capacity to 2,000 tonnes per day in future. The company has two refineries, both in Uttar Pradesh, at Simbhaoli and Brijnathpur.